Revive nuclear energy program
By F. G. Delfin Jr.
Philippine Daily Inquirer
First Posted 21:45:00 04/26/2008
NOW IS THE TIME TO REVIVE THE COUNTRY’S nuclear energy program. In the face of oil prices nearing $120/barrel, the demand to reduce greenhouse gas emissions and the need for reliable power for future economic growth, rebuilding our nuclear power capabilities becomes urgent.
If we go nuclear, we will be part of a global revival in nuclear energy. From stagnation in the 1990s due to cheap oil prices and the 1986 Chernobyl accident, nuclear power is now used in 30 countries where 372 GWe of aggregate capacity produces about 17 percent of the world’s electricity.
Though North America and Europe still lead nuclear power generation, construction of new nuclear plants is occurring most rapidly in Asia. China is building eight new nuclear power plants with a combined output of 7,300 MWe while India will add 2,700 MWe through five nuclear plants under construction. In Southeast Asia, Vietnam and Indonesia are the leading nuclear energy proponents both of which intend to operate their first 4,000 MWe nuclear plant by 2020.
The pace of a revived nuclear energy program hinges on rehabilitating the Philippine Nuclear Power Plant-1 (PNPP-1), which the International Atomic Energy Agency (IAEA) is now studying. Mothballing the completed 620-MW plant in 1986 saddled taxpayers with loan payments for 20 years. The Bureau of Treasury reported that in April 2007 we completed all loan payments amounting to P64.79 billion -- P43.56 billion for the principal and P21.23 billion for the interest. Thus, it is instructive to revisit how we built Southeast Asia’s first nuclear power plant but ended up not producing a single watt.
Aborted
A widespread but inaccurate view of the country’s nuclear power program, as Minister Geronimo Velasco once wrote, is that it was a Marcos-regime project. In fact, our nuclear program started in 1955 during the Magsaysay administration when we signed on to the US Atoms for Peace Program. President Carlos Garcia (1958) pushed for the creation of the Philippine Atomic Energy Commission (Paec) while President Diosdado Macapagal initiated the first UN pre-investment feasibility study (1963-1965) for a nuclear power plant in Luzon.
Institutional building continued during the first Marcos term with the passage of Republic Act No. 5207 (Atomic Energy Regulatory and Liability Act) in 1968 and RA No. 6395 in 1971, revising the charter of National Power Corp. (Napocor) to include construction and operation of nuclear power plants. In short, the vision of a nuclear-powered Philippines was shared and nurtured by Filipino presidents from Magsaysay to Marcos.
1973 oil crisis
The 1973 oil crisis spurred the Marcos regime to hasten nuclear power development. In 1975, Napocor and Westinghouse signed the contract to build the country’s first nuclear plant. In July 1977, Napocor applied for a construction permit and in April 1979, after a thorough review aided by the IAEA, the permit was granted by Paec. But construction in Morong was soon halted in June 1979 following the Three-Mile-Island accident the previous March.
After adopting the safety upgrades recommended by the Puno Commission and despite its growing unpopularity, the project resumed full construction in June 1981. Nuclear fuel was delivered on site in June 1984. An IAEA pre-operations safety review was conducted in February 1985 and a pre-operational core load test was completed in June 1985.
Collapse of Marcos regime
Needing only an operational license from Paec to start commercial operations, a succession of events doomed the country’s first putative nuclear power station. On Feb. 11, 1986, the Supreme Court enjoined Paec from issuing a license to Napocor. Two weeks later, the Marcos regime collapsed.
Following the Chernobyl accident on April 25, 1986, then President Corazon Aquino suspended the Westinghouse contract in May and created the Presidential Committee on the Philippine Nuclear Power Plant. This led to the Cabinet decision to mothball the plant, to sell the plant’s nuclear fuel to Siemens in December 1997, to transfer the plant’s assets, records and liabilities to the national government, and to file a case against Westinghouse and its contractor, Burns & Roe, in New Jersey. The case was subsequently settled in March 1992.
Under the Department of Finance (DOF), the Committee on Privatization (COP) prepared a three-stage asset disposition plan for PNPP-1. The sale of junk materials (first stage) and of spare parts (second stage) was completed years ago but the Department of Energy (DOE) recently requested the COP to suspend the final stage of selling the nuclear plant and land.
This was sought to let the IAEA study PNPP-1’s possible rehabilitation in the wake of recent trends in the United States, Eastern Europe and South America where half-finished nuclear plants mothballed in the 1980s are now being upgraded for electricity generation.
Earthquake, Pinatubo
Also, safety questions about PNPP-1’s supposed risky site decried by the local anti-nuke movement have been undercut by the plant’s experience with the 1990 Luzon earthquake, the 1991 Pinatubo eruptions, and by new analysis by UP geology professors Carlo Arcilla and Mahar Lagmay.
Surely, even if the 620-MW PNPP-1 can be rehabilitated there is no guarantee that this can bring down power costs significantly in the deregulated 12,000-MW Luzon grid. But it makes practical sense to study using this fully paid idle asset in view of increasingly uncertain and expensive energy supply.
Nuke power’s appeal
Economic, energy, environmental and technological trends have made nuclear power appealing once again. Strong global economic growth in the last five years has fueled strong demand for energy, particularly in the Asia Pacific. As a result, oil prices have more than doubled, gas prices have risen 75 percent and coal prices have increased 46 percent over the past five years, according to one industry review.
In turn, governments worldwide are enhancing their national energy security through fuel diversification and, as a result, the economic viability of nuclear power relative to other types of fuel has grown. A 2005 estimate by the International Energy Association (IEA), when oil was around $50 per barrel, already highlighted this cost-competitiveness.
Nuclear power also brings price stability to electricity cost. Crucial to this advantage is nuclear fuel’s low absolute cost compared with fossil fuel and its small share in total generation cost, making it ideal for base-load power generation.
Over the past years, uranium prices have generally been below $100/lb. An IAEA study indicates that even if uranium fuel prices are doubled, the impact on power costs are relatively minor compared with the effects of coal and natural gas power plants.
CO2 reduction
Although a global nuclear renaissance may increase demand for uranium ore, thus raising prices, experts agree that the known uranium ore supply is good for at least 50 years. And when exploration and untapped reserves are considered, there is enough uranium to run all nuclear reactors for about 180 years.
Widespread concern about global warming has also contributed to nuclear energy revival. Nuclear power plants have the least direct and total life cycle CO2 emissions (9-21 grams CO2 equivalent per kWh) compared with coal (966-1,306), natural gas (439-688), solar (100-280), hydro (4-236) and wind (10-48).
Nuclear power plants currently in operation effectively reduce global CO2 emissions by 1,600 million tons per year, according to an IAEA estimate. This ecological benefit, in fact, has divided the environmental community in the West with Greenpeace founder Patrick Moore and Environmental Defense among the most prominent and vocal supporters of nuclear energy.
Industry trends since Chernobyl have also contributed to growing acceptance of nuclear power. Investments in technology, especially in the United States, France, Japan and Korea have led to significant improvements -- construction time for new reactors and power stations has shortened, plant load factors have risen and overall safety record improved.
Safety record
Without minimizing the Chernobyl tragedy that led to 56 fatalities, nuclear industry’s safety record is said to be superior to those of others. A comprehensive review by the Swiss think-tank Paul Scherrer Institute showed that of the 4,290 energy-related accidents worldwide in 1969-1996, an average of 1 fatality/billion MWe-hr of electricity produced was attributed to nuclear power plants, compared with those in hydro (101), coal (39) and natural gas (10). With the anticipated introduction of more advanced generation III+ and IV reactors, nuclear power’s safety and efficiency are likely to be enhanced even more.
Clearly, these positive trends augur well for nuclear energy use in the country. But such endeavor requires both national commitment and international consent.
What is to be done?
DOE analyses during the term of President Fidel Ramos saw the need for nuclear energy by 2025. If IAEA assessment shows PNPP-1 can be rehabilitated, our nuclear power capability can likely be advanced, perhaps to around 2015. Whether we tap nuclear power earlier or later, however, should not derail our efforts to accelerate renewable energy development.
Nuclear and renewable energy must be regarded as vital elements for securing our long-term energy security. But in a democracy where future elections can allow the legislature and leaders to scrap a nuclear program regardless of past investments and consensus, policy risk is a more significant deterrent than technical and economic risks. Thus, any decision to restart our nuclear power program must be reached through a rational, scientific and transparent consultative process.
To do this, a high-level implementing body similar to the Nuclear Power Steering Committee formed in 1995 has to be created. Four public agencies are crucial members—the DOE, Napocor, Philippine Nuclear Research Institute (PNRI) and DOF. Inclusion of other public, industry, academic and civil society representatives will depend on specific tasks.
These tasks revolve around seven key policy issues oriented toward obtaining national and international accords for the Philippines to go nuclear:
Comprehensive legal framework. No constitutional obstacle exists for peaceful nuclear power use in the country but legal review of a few implementation issues is warranted. For example, how do electric power industry reform act and the Westinghouse out-of-court settlement affect investments in PNPP-1 rehabilitation or future nuclear power stations?
Effective regulatory system. The promotion and regulation of nuclear technology that PNRI solely exercises must be vested in two independent agencies; PNRI maintains the promotional role, while the regulatory function given to a new and quasi-judicial body.
Human resource development. Near-term human capacity building should take advantage not only of IAEA training programs but also those of companies in the Philippines like Tokyo Electric and Korea Electric Power Corp. that operate nuclear plants in their home countries.
Adequate financial resources. The sizable financing needed to start, operate and decommission nuclear plants in the country must be established. Worth exploring is the Finland model in which a consortium of industrial users who want assured long-term supply of stable, low-cost and clean energy is paying for the construction of a new nuclear power plant.
Radioactive waste management. Facilities for low- and intermediate-level nuclear waste disposal must be available while recognizing that even countries with successful half-a-century-old nuclear power programs have yet to operate a final repository for high-level waste.
Nuclear materials security. A commitment to a culture of safety must be demonstrated for handling and protecting nuclear materials, from fuel transport and storage, through plant operations and site security, to final waste and spent fuel disposal.
Stakeholder commitment. Political leaders will endorse nuclear energy if there is public support; hence, open, transparent, and continuous dialogue with local, national and international groups is crucial.
No technology is without risk. The key question is whether we are competent and motivated to mitigate the risks in order to benefit from nuclear energy use like many of our Asian neighbors. No energy dilemma facing the country today will test our collective skills, maturity, confidence and democratic principles more than nuclear energy use.
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(F. G. Delfin Jr., Ph.D., a former energy undersecretary, is an assistant professor at the UP-National College of Public Administration and Governance. He can be reached at fgdelfin@up.edu.ph)
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